Hanoman v Southwark Borough Council (2009)

English Property Law

Hanoman v Southwark Borough Council
Image: ‘Southwark, London’ by Rob Adams

While the ‘right-to-buy’ scheme allows council tenants to purchase their properties for determinable discounts, there are additional safeguards designed to prevent administrative vacillation between the two parties to contract. On this occasion, a local authority found itself on the wrong end of such an agreement, while the tenant was free to enjoy the fruits of an organised purchase.

In the autumn of 1999, a tenant served a right-to-buy notice under s.122 of the Housing Act 1988 for the purchase of his flat for a discounted price of £17,000. Under s.124 of the same Act, a landlord is required to respond in kind so as to allow the process to begin.

For one reason or another, the appellants chose not to acknowledge the respondent’s submission, on grounds that they believed he had withdrawn it, during which time further legislation was enacted so as to penalise landlords delaying the purchase under s.153A(1) (as inserted by the Housing Act 1985) through a ‘notice of delay’.

On 24 March 2003 the respondent issued such a notice, whereupon the appellants again failed to respond with a counter-notice, at which point s.153B of the 1988 Act further allowed a tenant to submit an ‘operative notice of delay’, thereby converting any paid rents into purchase contribution for the period between the notice of delay and the date of the as yet undelivered counter notice.

Following a declaration by the respondent on 22 June 2004 of the appellant’s failure to provide counter-notice, the parties went to court, during which the respondent was finally granted his s.124 counter-notice by the appellants on 2 July 2004, thus bringing to an end the period in which s.153B of the 1988 Act was in effect.

At the point of purchase, the effects of s.153B were left unresolved, at which point the local authority granted the respondent the right to pursue remedy through an appeal. It was thus contended to the Court that during the period between 24 March 2003 and 2 July 2004, sufficient rent had been paid so as to cover the £17,000 owed for the purchase of the flat, therefore no money was owed by the respondent, an argument supported by the Court, and one resulting in the appellants repaying the £17,000 paid with interest.

Taken to the House of Lords, the appellants argued that the respondent had relied upon housing benefits for his rent payments, and that as no money was passed between the respondent and the appellants, there was no evidence that any payment had been made nor received, as under those conditions a reduction in rent constituted the effect of such benefits, as opposed to an actual receipt of funds.

With examination of the Social Security Administration Act 1992, the House established that since its inception, Parliament had provided that under ss.140A to 140G, housing benefit was almost entirely subsidised through central government and not the local authorities, therefore despite any argument to the contrary, some form of payments were in effect, while for contextual purposes, the words of Lord Evershed MR in White v Elmdene Estates Ltd reminded that:

“[T]he word ‘payment’ in itself is one which, in an appropriate context, may cover many ways of discharging obligations.”

It was for this reason that the House upheld that regardless of exactly how the rent was realised, the effects of s.153B of the Housing Act 1988 existed to avoid the very problem the appellants had created, before dismissing the appeal and upholding the judgment of the Court.

Associated Provincial Picture Houses Ltd v Wednesbury Corp

English Constitutional Law

Associated Provincial Picture Houses Ltd v Wednesbury Corp
Image: ‘New York Movie’ by Edward Hopper

Acting ultra vires through the application of executive powers is not something alien to public authority decision-making, but it is equally important that those seeking legal review are clear as to exactly what has constituted a breach of their jurisdiction.

During the period following the second world war, there were three Acts that affected the opening times of cinematograph houses across the UK. The first was the Cinematograph Act 1909, the second was the Sunday Entertainments Act 1932, and third was Defence Regulation 42B, which was introduced during the war, but remained effective until late 1947.

When it was decided by an issuing local authority to grant a trading licence to their local picture house, there came with it restrictions preventing any attendance by children aged below fifteen years of age, regardless of whether they were accompanied by an adult. While appreciative of the opportunity to open on a day typically reserved for domestic pursuits, the appellants sought judicial review on grounds that such a restriction was self-defeating and thereby ‘unreasonable’.

As there were three Acts from which to rely upon, it was agreed that for the purposes of clarity the Sunday Entertainments Act was the most appropriate, and yet within the terms prescribed, s.1 ss.1 provided that the issue of a licence was “subject to such conditions as the authority think fit to impose.” This, it was agreed, allowed the local authority to apply its discretion to the limitations of the permit, and so by extension, it had acted accordingly.

When heard in the first instance, the court dismissed the objections brought by the picture house, and after a brief but considered review of that decision, it was reiterated that while the courts are able to question the legal validity of executive decisions, they are not equipped nor predisposed, to challenge the illegitimacy of those limitations, unless the body in question has applied it powers outside the boundaries of reasonableness, and in ignorance of required objectives.

Relying upon the relevant case history behind these matters, there was, despite strong opposition by the commercial vendors, no precedent upon which their argument could stand, and thus the court noted that it was important to hold in mind the scope of discretion afforded local authorities when following statute before taking legal action, while further reminding the parties that:

“[T]he court, whenever it is alleged that the local authority have contravened the law, must not substitute itself for that authority.”

Estoppel

Insight | March 2017

Estoppel
Image: ‘Girl Interrupted at Her Music’ by Johannes Vermeer

‘Estoppel’ or by virtue of its purpose ‘interruption’, is a legal source of remedy often used in connection to land or property related matters, but is readily used in numerous fields of dispute. The concept behind this intervening doctrine is one that prevents a miscarriage of justice where through discourse and action, a party is found to suffer at the expense of another’s profit. Because this approach often falls outside of common law rules, it frequently requires equity to redress the balance in favour of a fair and reasoned settlement where proven as fact.

To date, there are distinct and overlapping forms of estoppel, and so the list below while no means definitive, aims to cover the more familiar (and unfamiliar) versions used within domestic and international law.

Promissory Estoppel (or Equitable Estoppel)

Founded within contract law, this form of estoppel relies upon the promise of one party to another that is later revoked and proven detrimental to the promisee. Naturally circumspect of the rules of contract, the essence remains equitably valid, and was best witnessed in Central London Properties v High Trees Ltdwhere Denning J remarked:

“The logical consequence, no doubt, is that a promise to accept a smaller sum in discharge of a larger sum, if acted upon, is binding notwithstanding the absence of consideration.”

Proprietary Estoppel

As founded and used most in property law, there are three main elements to qualifying action in proprietary estoppel, namely (i) that the landowner leads the claimant to believe he will accumulate some proprietary right, (ii) the claimant acts to his own detriment in reliance of the aforementioned right, and (iii) those actions are demonstrably in reliance of the expected right, where otherwise different choices might have been made. This was explained by Lord Scott of Foscote in Cobbe v  Yeoman’s Row Management Ltd who said:

“An estoppel bars the object of it from asserting some fact or facts, or, sometimes, something that is a mixture of fact and law, that stands in the way of some right by the person entitled to the benefit of the estoppel. The estoppel becomes a proprietary estoppel – a sub-species of a promissory estoppel – if the right claimed is a proprietary right, usually a right to or over land but, in principle, equally available in relation to chattels or choses in action.”

Estoppel within Public Law

This is often used where a member of a public body has issued assurances that (i) an action can be undertaken by  member of the public, or (ii) that the specific body will exercise its power to the benefit of the person enquiring. Where either fact has been proven correct, the designated department or authority is held liable to follow through on that action where reasonable, and in line with public interest, as was discussed in Southend-on-Sea Corporation v Hodgson (Wickford ) Ltd, although the applicable claim was never upheld after it was stressed by Lord Parker CJ  that:

“[I]t seems to me quite idle to say that a local authority has in fact been able to exercise its discretion and issue an enforcement notice if by reason of estoppel it is prevented from proving and showing that it is a valid enforcement notice in that amongst other things planning permission was required.”

Estoppel by (unjust) Conduct

This phrase is largely self-explanatory, but can be best surmised as visibly manipulative or unreasonable behaviour by one party toward another, for example when securing an annulment, as was explored in Miles v Chilton, where the groom falsely induced his fiancée into a marriage that was by all accounts, illegal, as the bride-to-be was in fact still married to her previous husband, despite his misleading her that the annulment had succeeded. The destructiveness of this self-created dilemma was explained by Dr. Lushington, who despite awarding in favour of the claimant, warned that:

“[H]ere the averment of marriage is made by the party having an opposite interest, and we well know that every one is bound by his admission of a fact that operates against him.”

Estoppel by Per rem Judicatam (or issue estoppel)

This is another family law approach, which translates that a judicial decision to grant nullity cannot be overturned after the fact, except in circumstances where the annulment is proven invalid, after which any party aside from the divorcing couple, can challenge the direction of the court. This form of estoppel can however, be found in criminal law cases, as was seen in Hunter v Chief Constable of the West Midlands Police and Others, where Lord Diplock commented that:

“The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made.”

Estoppel through Acquiescence (or Laches or Silence)

As used in a number of fields, there are requisites that the party claiming estoppel has had their hand forced into complying with matters that they had in fact not been properly consulted upon, as was argued in Spiro v Lintern, where a husband was held to agree to the sale of his co-owned property, despite not having consented to his wife’s putting it up for sale, and the purchaser proving able to enforce the contract in his name through her individual representation. It is also applied in cases where a secondary party to a contract or notice, fails to challenge it within a reasonable period, after which estoppel of acquiescence can be used to deter any claim to the contrary, as was used in Kammins v Zenith Investments, where Lord Diplock again explained:

“[T]he party estopped by acquiescence must, at the time of his active or passive encouragement, know of the existence of his legal right and of the other party’s mistaken belief in his own inconsistent legal right. It is not enough that he should know of the facts which give rise to his legal right. He must know that he is entitled to the legal right to which those facts give rise.”

And in the U.S case Georgia v South Carolina, where it was held that:

“South Carolina has established sovereignty over the islands by prescription and acquiescence, as evidenced by its grant of the islands in 1813, and its taxation, policing and patrolling of the property. Georgia cannot avoid this evidence’s effect by contending that it had no reasonable notice of South Carolina’s actions. Inaction alone may constitute acquiescence when it continues for a sufficiently long period.”

Estoppel through Encouragement

Similar to acquiescence, this form of estoppel was discussed in Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd,  where Oliver J defined it in the following passage:

“The fact is that acquiescence or encouragement may take a variety of forms. It may take the form of standing by in silence whilst one party unwittingly infringes another’s legal rights. It may take the form of passive or active encouragement of expenditure or alteration of legal position upon the footing of some unilateral or shared legal or factual supposition. Or it may, for example, take the form of stimulating, or not objecting to, some change of legal position on the faith of a unilateral or a shared assumption as to the future conduct of one or other party.”

Estoppel by Convention

Often used in contract law, this principle comes into effect when two parties have relied upon an assumed true statement of fact, only to learn otherwise after the actions undertaken have been shown as unreasonable or unlawful. Any wrongful decision to then undo the damage is by definition, estopped on those grounds, as was discussed in Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd, where Denning LJ  eloquently concluded that:

“When the parties to a contract are both under a common mistake as to the meaning or effect of it – and thereafter embark on a course of dealing on the footing of that mistake – thereby replacing the original terms of the contract by a conventional basis on which they both conduct their affairs, then the original contract is replaced by the conventional basis.”

Estoppel by Representation (or Pais)

Again found in many contractual matters, this doctrine is bought into effect when a party that has agreed to a change in the terms of the relationship (often supported by a promise of trusted representation of their own) later chooses to renege on that statement, despite the other party altering their position to accommodate that express arrangement. This was found in Royal Bank of Scotland v Luwum, where Lord Justice Rimer outlined that:

“[T]he clear sense of the arrangement was that Mr Le Page was making a representation or promise to Mr Luwum that the Bank would hold its hand on enforcing its rights for three months, and Mr Luwum changed his position in reliance upon that by borrowing £260 from friends and family in order to make a payment to the credit of the account, which was the very purpose of the arrangement that was made. In my judgment those circumstances had the consequence of estopping the Bank from reneging on its promise and starting the proceedings it did before the expiry of the three-month period.”

Estoppel by Deed (or Agreement)

This doctrine is applied when two parties agree to contract with each other for whatever intended gain or purpose, in the knowledge that the terms of the contract (or in these instances deeds) are based upon fraudulent fact, and nothing more. It is suggested that the motivation for such covenants is one of singular gain on the pretence that should the truth out, those facts will remain unchallenged. It is this kind of clandestine deception that was explored in Prime Sight Ltd v Lavarello, where Lord Toulson JSC mused:

“If a written agreement contains an acknowledgement of a fact which both parties at the time of the agreement know to be untrue, does the law enable on of them to rely on that acknowledgement so as to estop the other from controverting the agreed statement in an action brought on the agreement?”

Estoppel by Contract

Again, the terms of the contract can themselves prevent enforcement between disputing parties, as was discussed in Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd, where it was said:

“Where parties express an agreement…in a contractual document neither can subsequently deny the existence of the facts and matters upon which they have agreed, at least so far as concerns those aspects of their relationship to which the agreement was directed. The contract itself gives rise to an estoppel…”

In closing, it must be iterated that the doctrine of estoppel exists as a rule of evidence and not a cause of action, therefore any idea that this principle can, and should, be wielded as a defence or prosecution, falls outside the intended design and usurps its undiluted use.

Public Body Duty of Care in Tort

Insight | February 2017

Public Body Duty of Care in Tort
Image: ‘Vicarious Trauma’ by Amy Gaskin

Within the field of tort, there are a number of victims that are recognisable for damages in extenuating scenarios. These include rescuers, involuntary participants, communicators of shocking news, witnesses to self-harm and those held under an assumption of responsibility by the defendant.

There are of course exemptions from such events, in particular public bodies (despite being funded by tax payers money). One argument for such paradoxical exclusion is that making public bodies pay for their mistakes would place a strain upon public services funds, and lead to division of public resources in times of need.

This ironically raises the question of whether liability should exist when the public body has the power to act despite no duty to do so? The House of Lords determined that no duty of care was owed in respect to negligent use of power, unless that action made the claimant’s situation worse than it was before, while jurisprudence around the European Convention of Human Rights (ECHR) and the Human Rights Act 1998 (HRA) altered the previous threshold regards duty of care.

In D v East Berkshire Community NHS Trust and others, ‘defensive practices’ were seen as a consequence of liability on the part of the local authority staff, which would compromise their standard of work, therefore it was subsequently felt that a duty of care was owed to children in extraction cases, but not to all parties.

In the earlier case Osman v Ferguson, and the later Osman v UK, the police were initially offered immunity from a duty of care until the parents of a murdered pupil appealed to the European Court of Human Rights (ECtHR), under the observance that while art.6 of the Human Rights Act 1998 provided public body immunity, it denied the family from receiving a fair trial, while no attempts were made to distinguish Osman from the earlier Hill v Chief Constable of West Yorkshire, despite marked differences.

Of notable interest, is the knowledge that the fire service has no duty of care to respond to an emergency call or to turn up and attempt to fight a fire. It does however, have a positive duty not to make matters worse in the event that they do attend such events, albeit with the caveat that it does not have a duty of care to prevent the fire from spreading. On the upside, at least the ambulance service does owe a duty of care to individual claimants in specific circumstances, while also possessing a duty to respond to emergency calls, although this is only because the domestic courts view the service as an extension of the National Health Service (NHS), which itself owes a duty of care to all of its patients.

Much like the fire service before, the coastguard owes no duty of care to respond to calls from people in trouble at sea, only a duty to not make matters worse when they arrive. While in contrast, the British armed forces are only held to owe a duty of care when the defendant can be said to have assumed responsibility to the client, just as little comfort is taken in the knowledge that there is no duty of care owed to the public under battle conditions, or in times of threat.

Stovin v Wise (1996)

English Tort Law

Stovin v Wise
Image: ‘Driving Around Coorg’ by Prashant Prabhu

Note: To read about this case in greater depth, and with the benefit of full OSCOLA referencing, simply purchase a copy of ‘The Case Law Compendium: English & European Law’ at Amazon, Waterstones or Barnes & Noble (or go here for a full list of international outlets)


This appeal case discusses the actions (or inactions) of public bodies, when operating under the guidance of statute and a prerequisite (albeit narrow) duty of care towards the general public.

After a number of road traffic accidents had occurred in a well-known intersection, the focus of  complaint by drivers at the time, centred around a small patch of land on one of the number of corners, which obscured vision and thereby contributed to the now growing number of injurious collisions.

When consideration was taken by the highways agency operating under the local authority to try and remove the affected area, the decision was taken to write to the land owners British Rail, and request that either the State body take steps to remove the blockage, or that permission might be granted for the local authority themselves to carry out the work, at cost to the State under s.79 of the Highways Act 1980.

Under the power of such statute, the local authority were at their own discretion, able remove the land at cost to themselves, in order to circumvent any undue objections, and while acting in the interest of public safety. Unfortunately, while the local authority did write to the corresponding public body, and a meeting was held to examine how best to proceed, the letter was ignored by the recipients, and the sender was later moved to another council department, without explaining to anyone that the matter was under review, and that further action was needed.

When the claim for negligence and breach of statutory duty was initiated by the victim of the accident, damages were awarded, and shared liability placed upon the driver and local authority (in varying degrees), after which an appeal was made by the defendant public body.

During the hearing, judge Lord Hoffman’s view of operational policy translated that:

“The distinction between policy and operations is an inadequate tool with which to discover whether it is appropriate to impose a duty of care or not.”

In other words, just because the highways agency and local authority were obligated to provide safe roads and road surfaces to the general public, private land that prevented an unobscured field of view did not render those same bodies liable for a duty of care, even if they had decided to take steps outside of prescribed statute to remove the obstruction at cost to themselves.

This case ties strongly with the constitutional concept of ‘justiciability’, which is to say that because public bodies are created by statute through the democratic process, the court recognises the limitations of their capabilities, and subsequently hesitates to challenge them.

Hedley Byrne & Co Ltd v Heller and Partners (1963)

English Tort Law

Hedley Byrne & Co Ltd v Heller and Partners
‘Bankruptcy’ by Vladimir Makovsky

Duty of care under accusations of negligence, particularly within the carelessness of speech, forms the basis of a claim between a corporate entity and a merchant bank. On this occasion, the appellant advertising agency had taken steps to ascertain the financial credibility of a new client; which while careless in its execution, left them at a considerable loss when the information proved worthless.

In 1957, the appellants received instruction from a new client requiring a number of advertisements, which was later followed by a request for a structured advertising programme with estimated costs of around £100,000 p.a. Given the short-term trading history between them, the appellants asked their bank to consult their client’s bank so as to establish their financial standing. 

The reference, which was by no means official, read that their client was ‘a respectably constituted company whose trading connection is expanding speedily’ and that ‘We consider the company to be quite good for its engagements’. Upon this positive note, the appellants proceeded to organise scheduled television and newspaper slots at cost to themselves, on the strength of the bank’s statement.

Several months later, the appellants concerns for the financial integrity of their client grew to the point where a second reference was requested. This time, an oral banker’s report was provided for by the respondents, that while detailed enough to warrant a sound response, was issued under the express notice that it was given with no responsibility for the outcome of the enquiry. Within this report was knowledge that the client was a subsidiary of a parent corporation in the throes of liquidation, but the bank similarly emphasised that they had confidence in the director and his integrity as a businessman.

With written confirmation of the report sent by the bank to the appellants, the terms expressed were relied upon when in light of their client’s liquidation, the appellants suffered losses of around £17,000. It was this somewhat unsurprising event that triggered a claim for damages, based upon negligence by the respondents when offering statements that were contributory to the appellant’s extension of credit.

In the first instance, the court awarded in favour of the respondents, and when taken to the Court of Appeal, the outcome remained unchanged on grounds that such principles were unreasonably applied to the unrehearsed statements of a banker, and not an official credit report. Presented to the House of Lords, the principles of negligence peripheral to any contract, were examined for exactness, whereupon the dicta of Sir Roundell Palmer in Peek v Gurney initially proposed that:

“[I]n order that a person may avail himself of relief founded on it he must show that there was such a proximate relation between himself and the person making the representation as to bring them virtually into the position of parties contracting with each other…”

There was also mention of Candler v Crane, Christmas & Co, in which a proposed corporate takeover involved the presentation of company accounts to the prospective buyers, accounts that by all intentions had been carelessly prepared, and on which the investors had relied when purchasing the firm. While in Robinson v National Bank of Scotland Ltd, a guarantor was left facing huge debts when it was argued he had been falsely induced into signing by the lenders, prior to the borrowers lapsing into bankruptcy. In this matter, Haldane LJ commented:

“[W]hen a mere inquiry is made by one banker of another, who stands in no special relation to him, then, in the absence of special circumstances from which a contract to be careful can be inferred, I think there is no duty excepting the duty of common honesty…”

While in Shiells v Blackburne, Loughborough LJ stressed that:

“[I]f a man gratuitously undertakes to do a thing to the best of his skill, where his situation or profession is such as to imply skill, an omission of that skill is imputable to him as gross negligence.”

In Cann v Willson, the claimants sought the professional opinion of valuers when borrowing against the worth of their home; and having provided what was suggested as a moderate valuation, the claimant defaulted on the required payments, whereupon the sale of the property failed to cover the debt owed. On this occasion, the court awarded in favour of the claimant on grounds of negligence, want of skill, breach of duty and misrepresentation.

In Nocton v Lord Ashburton, Shaw LJ propagated the principle that:

“[O]nce the relations of parties have been ascertained to be those in which a duty is laid upon one person of giving information or advice to another upon which that other is entitled to rely as the basis of a transaction, responsibility for error amounting to misrepresentation in any statement made will attach to the adviser or informer, although the information and advice have been given not fraudulently but in good faith.”

This translated to a recognition by the House that while there was no question that a duty of honesty was inherent to the words of the bankers, there was no evidence to suggest fraudulent or misrepresentative intention, particularly when at the time the advice or report was issued, the respondents had expressed their abject unwillingness to be held to account for the actions of the company discussed. This left the appellants with no substance upon which to claim damages and so the appeal was uniformly dismissed, while the House held that:

“[I]f someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference.”